Hedging involves reducing risk through various strategies, including matching maturities of assets and liabilities. It is a risk reduction strategy and is often difficult to achieve perfectly in practice due to factors such as market volatility and changing interest rates. Therefore, all the options are correct.

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Hedging Is

Question 108

Multiple Choice

Hedging is

A) matching the maturities of assets and liabilities to reduce risk.
B) a risk reduction strategy.
C) almost impossible to achieve perfectly in practice.
D) all of the other answers are correct

Correct Answer: